Question

Netpass company has 600,000 shares of common stock authorized, 510,000 shares issued, and 240,000 shares of treasury stock. the company's board of directors declares a dividend of $0.65 per share of common stock. what is the total amount of the dividend that will be paid?

Answer 1

The company has issued only 510,000 shares out of authorized 600,000 common stocks. As we know that dividend is paid only on issued shared, and treasury stocks do not get any dividend. So the total amount of dividend that will be paid = 0.65 * 510,000 = $331,500